St. Paul daily globe., 1887-06-14
The Bottom Drops Out of the Market and
Several Heavy Firms Are Forced
to the Wall.
One Of Them Said to Fave Incurred
Liabilities Amounting to About
$4,000, 900.
The Origin Of the Panic Laid at the Door
of What is Called the Brazilian
Party.
Prospects for the Future---Arrangements
on Foot Already to Curtail the
Supply.


in the coffee market which has attended
the decline in coffee reached its height
to-day and the brokers acting for the
bull operators became panic-stricken
and rushed to sell without regard to
price. The bulls blame the Gruneer-
Crossman syndicate for starting the de-
cline which eliminated in tO-day's
panic, but the bear syndicate strained
every nerve to check the fall, without
success. In fact, syndicate brokers were
the only buyers at the opening, which
was at II cents pound, over l cent
below Saturdays closing, and although
a rally was caused by the bear-support-
ing orders, the rumOrs of trouble and
the continued selling caused them to
stop buying and join the bulls in
UNLOADING THE STUFF
they had taken early. All through the
forenoon the selling was coupled with
exchange, and in all the Offices there
were knots of brokers gathered discuss
ing the prospects of a recovery. In the
afternoon there was some hope of
rally, but the heavy selling continued,
and soon the price fell Off in heavy
fluctuations until it reached II cents
per pound. This decline was accom-
panied by the notice of the suspension
of the firms of B. G. Arnold IL CO.,
Norton, We'll 81 Bevan and Mackay d
Small. After the announcement of the
failures an organized effort was made
by the prominent houses, like Dona-
hue, Gruner & Crossman, to sustain
the market and they succeeded in caus-
ing rally of about 1 cent all around.
The failure of b. G.. Arnold & Co. att
tracted the most attention, as they are
the most prominent house in the trade,
but it was generally anticipated. The
senior member of the firm was caught
in 1882 by the collapse of one of the
largest deals ever attempted in coffee
ana was compelled to suspend for over
S1,000,0O0. lie started in business
again, however, and was successful in
all his ventures. He is credited with
being the founder of 5jthe coffee ex-
dent, but-en Aug. 10 last he formed a
partnership with his son and since then
they have done strictly commission
business. He aSeribeS the failure to the
fact that his customers were SO far away
that it was impossible to reach them in
time to obtain sufficient margins to
meet the decline. He,could n..
MAKE NO STATEMENTS
of his liabilities, and said that he could
not say anything about the chances of
resuming. Outsiders claim that the firm
has been carrying 100000 bags of coffee
for the Rio JanierO operators known as
the Brazilian party. 1t is estimated
that the liabilities will amount to over
S17,000,O00. The Brazilian party started
to buy coffee after the Gruner- CroSsman
syndicate advanced the price from Is
cents a pound, and since then the Gruner
syndicate have been bears on the market
and are said to have unloaded all their
long stuff ON the BraZilianS. The ex-
treme decline is from 21.30 two weeks
ago to Is cents to-day, or over "a cents
a pound. There was some talk of
trouble in banking circles us a result of
the panic, but as the banks only loaned
50 per cent. of the market value on
coffee it is hard to see how any of them
could have been involved. Mackay &
Small, one of the suspended firms, are
supposed to have liabilities of sa0O, eco.
The liabilities of the other firms are
small. The sales of the day were twice
as large as Oil any previous day in the
history of the exchange: 412,OO0 bags
were sold, 225, 1000 bags being sold after
the second call. The following
SHOWS THE RESULT
of the suspensions and the panic: July
coffee before Arnold's failure was an
nounced was quoted at 1925, after the
announcement at Is, at the close of the
exchange at 1910. 1t will be seen that
the announcement of the failure caused
a general and more or less uniform de-
cline. With two exceptions the closing
prices We're higher than prices before
the failure. June coffee was naturally
most heavily affected, dropping go
points, and only rallying Las points at
closing. The following table of closing
prices is perhaps the most comprehen-
Sive resume of the day: